Shell subsidiary Shell Petroleum Company has reached an agreement to sell its majority stake in the Pakistan unit to Saudi Arabia company Wafi Energy.

The financial terms of the transaction were not disclosed.

Shell Petroleum Company owns a 77.42% stake in Shell Pakistan, which is listed on the Pakistan Stock Exchange.

Shell Pakistan’s operations in the country include more than 600 mobility sites, ten fuel terminals and a lubricant oil blending plant.

The Pakistan business, which was formed in 1989, also owns a 26% stake in Pak-Arab Pipeline Company.

In June 2023, Shell Petroleum Company announced plans to exit its Pakistan operations to simplify the UK-based oil and gas giant’s business.

During the first half of 2023, Shell Pakistan reported a 53.3% decline in profit after tax to Rs3.5bn ($12.6m).

Announcing the result, Shell Pakistan said: “The period witnessed devaluation of the Rupee, rising inflation and macroeconomic uncertainty. Continued economic challenges resulted in slowdown in economic activity, decrease in demand and risks to supply security for the company.”

Subject to regulatory approval, the divestment is expected to be completed by the fourth quarter of 2024.

Following the deal, the Shell brand will be present in Pakistan through licensing agreements with brands, and customers will be able to have access to Shell’s portfolio of products.

Shell has been cutting back its business in the country for the past few years.

In 2016, the energy company sold its 28.57% ownership in Pakistan Refinery in a deal valued at $8.2m.

The acquiring company is a wholly owned unit of Saudi Arabia’s Asyad Holding Group.

In 2022, Wafi Energy, a fuel retailer, signed a licence agreement to run mobility sites in Saudi Arabia under Shell’s brand name.